Upvote:9
Historically, Sweden ended trade with Germany in November 1944. That is a bit late in the war, and Allies pressured them to do something much earlier, but there was always a threat of German army stationed in Norway and Sweden was practically isolated in Scandinavian peninsula. Add to that significant part of population that were anti-Communist and supported formations like 5th SS Panzer Division Wiking.
What did change late in 1944 ? Not only was Finland knocked out of the war, it actually attacked their former German allies in Lapland War. Soviets, on their part organized PetsamoβKirkenes offensive which pushed Germans out of northern parts of Norway. Soviets didn't continue their offensive deeper into Norway, and didn't come to Swedish border, nevertheless their presence put some pressure on German forces in Norway. Also, German forces in Norway were reduced towards the end of the war, not completely, but good number of troops were transferred back to Germany for defense of homeland. Finally, Swedish army was growing in strength, equipment and training, therefore danger of complete and successful German invasion and occupation was almost non existing in late 1944.
With all this said, Swedes decide to slowly distance themselves from Germans, but not to engage in (for them) senseless bloodshed. Sweden was no longer isolated and weak, and Germans didn't need another enemy, so likelihood of German attack was almost nil even if Swedes completely closed their border for Germans. At the same time, German forces in Norway were not to be underestimated (especially since they did have a number of combat veterans from Eastern Front among them). Any help to Sweden was likely to be delayed and limited by distance of that new theatre of war. Therefore, Swedes took middle ground, didn't fight Germans but also didn't trade with them (at least officially).